Even with a $6 million decrease from the proposed budget to the tentative budget, the city of Sedona is still clinging to the largest budget in its history, at $105.7 million.
Before the Sedona City Council tentatively approved the budget at their last meeting, city staff worked for months on the proposed budget.
The $105,745,040 expenditure budget accounts for both the 17% increase for a $49,959,990 operating budget and the 181% increase for a $55,785,050 capital improvement budget.
According to the city’s Director of Finance Cherie Wright, the operating budget’s increase comes from the transit system, increased debt service costs, police pension plan, evacuation modeling, short-term rental monitoring, sustainability program enhancements and additions to community service contracts.
The $28.33 million general fund, the second highest budgeted section after the capital improvement budget, breaks down into 15 categories for different departments in the city. The city budgets seven of those departments over a million, with departments like Sedona’s Police Department at $7,731,130.
Additionally, indirect cost allocations, debt services and contingency are all set at over $2 million each.
Other major changes, according to staff reports, relate some of the increase to staff changes, salary and benefit increases and an increase of $2.2 million for bonds issued for Sedona in Motion projects and a placeholder for possible debt related to land acquisition.
Although much lower than the general fund and the capital improvement fund, the wastewater fund is the third highest section at $17.64 million.
City Revenue
“The city has more than adequate financial resources to move forward with the goals established by the Community Plan and has a responsibility to use those resources toward the completion of those goals,” Wright said.
The city has a few prominent ways to collect the funding for this $105.7 million budget. But the largest majority of this upcoming budget will come from the estimated $36,570,000 in sales tax collected and the estimated $10,232,000 in bed tax collected in 2022-23.
Many of the council members look at these numbers and associate them with increased tourism, yet discount the revenue brought in by residents themselves.
From studies back in 2019, nearly 23% of the revenue is collected from the residents of Sedona.
As the residents will pay around $8.4 million in sales tax to the city, the city raised their wages and salaries again to disburse $18,899,000 in just full-time employee wages. And with capital improvement projects like the $18 million Uptown parking garage now budgeted for $7 million more than anticipated, operating costs may not see a downturn for a while as inflation continues to direct the city’s spending.
“One-time costs within the operating budget can also vary from year-to-year depending on the goals established. The ongoing costs within the operating budget are likely to see increases in future years due to the ongoing implementation of goals established in the Community Plan and simply because of inflation,” Wright said. “However, during recessionary periods the city has traditionally reduced service levels, delayed maintenance and improvement costs, and cut budgets so the same approach would very likely happen in the event of the next recession.”
The tentative budget is set for final approval in August
